What do Keynesians mean when they say that "you can't push on a string"?
A) An increase in the supply of goods does not really create its own demand.
B) If the government reduces taxes in an attempt to increase household consumption,it will not always work.
C) An increase in the money supply will not always stimulate the economy.
D) If the government wants to get something done,the best way is not to force the issue,but to offer incentives.
E) If the government puts too much expansionary pressure on the economy,it will probably "overheat."

Question

Quizplus · Accepted Answer

This phrase means that government intervention in the economy, such as increasing the money supply, might not be effective in stimulating economic activity because individuals and businesses may not respond as expected. The metaphor of pushing on a string implies that attempting to increase economic activity through monetary policy may not work, just as trying to push a string is ineffective because the string will not move in the intended direction.

What Do Keynesians Mean When They Say That "You Can't